Reason Foundation

http://reason.org
http://reason.org/news/show/public-option-for-ems-in-salt

Reason Foundation

Public Option for EMS in Salt Lake City?

Leonard Gilroy
October 5, 2009, 2:01pm

A Salt Lake Tribune editorial yesterday suggested that Salt Lake City abandon competitive contracting for emergency medical services (EMS) in favor of starting a new city "public option." According to the editorial:
Protecting the public is a core government function, too important to privatize. With its ability to tax and borrow and quickly adjust service levels without renegotiating contracts, the city can better assure that residents are well-served. [...]

Privatization, for some services, makes sense. But not for vital, essential functions like emergency medical services. When employees on the front line answer directly to elected officials, control is one step closer to the people who pay the bills.

Let's be clear—the city already contracts out for EMS services, so that train has already left the station. And I find it odd that of the three options facing the city—renegotiating its current contract, rebidding the contract, or starting its own (costly) in-house service—the editorial board jumps straight to the most expensive and highest risk option.

The drawbacks of the in-house option seem obvious—increasing the number of public employees and the long-term pension and health obligations that come with them, enormous start-up and capital costs, the risks and costs associated with long-term vehicle management, and the big one—the risk that performance slides when the service becomes a government monopoly subject to less accountability. In fact, improved performance is one of the main reasons cities privatize EMS in the first place.

A few years ago Reason Foundation released an FAQ on EMS privatization that anticipates this "inherently governmental" argument:

Many people regard EMS as an inherently governmental task and see it as a leap of faith to place lives in private hands. Since so many people are only familiar with government-provided EMS, it's natural for EMS privatization to be met with some initial apprehension. Even those friendly to privatization in other areas, like water service or garbage collection, may be slow to embrace privatized EMS. After all, if emergency response is poor, people die.

But so many cities privatize EMS precisely because the stakes are so high. EMS is too vital to shield from competition. Those skeptical of privatization should consider the limitations cities already endure under the alternative. The real leap of faith is to commit to one provider, forever, regardless of performance. Public EMS monopolies lack much in the way of "carrot or stick" incentives, and as such they have little hope of being rewarded for strong performance and little fear that poor performance will lead to their replacement. A private provider cannot compel a city to use its services, so it must pay special attention to customer satisfaction. Private providers know that a good reputation is the best way to expand into new markets.

Privatization allows cities to benefit from a level of technology, specialization, and expertise only available in the private sector. Competition provides us with ever-improving drugs and medical devices. It makes sense that it would also provide us with better EMS.

The bottom line is that privatizing EMS is not a matter of trust—it’s a matter of contract. A city doesn’t hand a contract to a private provider and walk away with fingers crossed, hoping that the firm will make good on its performance promises. Under privatization, elected officials still maintain crucial oversight roles. Officials shop for the best EMS provider, and set performance standards.
Read the whole FAQ for more on EMS privatization.

» Reason Foundation's Annual Privatization Report 2009
» Reason Foundation's Privatization Research and Commentary


Leonard Gilroy is Director of Government Reform


Print This